The role of ambiguity tolerance in consumer perception of remanufactured products

• Published in: International journal of production economics 2012-02, Vol.135 (2), p.781-790
• Main Authors: Hazen, Benjamin T., Overstreet, Robert E., Jones-Farmer, L. Allison, Field, Hubert S.
• Format: Article
• Language: English
• Subjects: Ambiguity; Commands; Consumer behavior; Economics; Empirical analysis; Marketing; Perception; Product quality; Quality; Remanufacturing; Structural equation modeling; Studies; Tolerances; Willingness to pay
• ISSN: 0925-5273; 1873-7579
• DOI: 10.1016/j.ijpe.2011.10.011

This study examines ambiguity tolerance, perceived quality, and willingness to pay for remanufactured products. We found evidence to support a direct relationship between a consumer's tolerance for ambiguity and their willingness to pay for remanufactured products. There was also support for an indirect relationship between ambiguity tolerance and willingness to pay that is mediated through perceived quality. Extant literature often lacks an empirical justification regarding costing and quality assumptions for remanufactured products. This research provides such justification while also offering an explanation as to why consumers view remanufactured products as being of lower quality and are less willing to pay for them. Those employed in the remanufacturing industry are advised to reduce the level of ambiguity associated with their remanufacturing processes in order to command higher prices for their products in the marketplace. ► We posit that remanufacturing processes are a source of ambiguity for consumers. ► Examine if ambiguity aversion affects consumer perception of remanufactured products. ► Ambiguity tolerance is related to perceived quality of remanufactured products. ► Ambiguity tolerance is related to willingness to pay for remanufactured products.